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Freddie Mac Purchase Agreement

9 abril, 2021

In exchange for financial assistance from the Department of Finance, the SPSPA requires: among other things, quarterly dividends to the Treasury, grant a liquidation preference to the Treasury and pay from 2010 a periodic commitment fee reflecting the market value of the outstanding cash commitment, as well as equity guarantees for the purchase of common shares representing 79.9% of the common shares of Fannie Mae and Freddie Mac. , or on a diluted basis. On December 21, 2017, correspondence agreements between the Ministry of Finance and each company changed the terms of senior stock certificates issued under the SPSPs to allow each company to maintain a quarterly capital reserve of $3 billion. As part of the 2017 correspondence agreements, each company paid a dividend to the Treasury, up to more than $3 billion of its net assets at the end of each quarter. These conditions applied to the payment of dividends on December 31, 2017 and dividends paid for each quarter, until the implementation of the correspondence agreements of September 30, 2019. FHFA Director Mel Watt made a statement on the 2017 match agreements when they were announced. On September 30, 2019, the Department of Finance and the Federal Housing Finance Agency (FHFA) announced, as curators of Fannie Mae and Freddie Mac, changes to the «Preferred Senior Stock Certificates» to allow Fannie Mae and Freddie Mac to retain profits in excess of the $3 billion in capital reserves authorized by the 2017 correspondence contracts. Fannie Mae and Freddie Mac are now allowed to maintain capital reserves of $25 billion, or $20 billion. These changes were recommended in the housing reform plan released on September 5, 2019. Mark Calabria, director of the FHFA, made a statement on the 2019 correspondence agreements, when they were announced. A federal judge in the District of Columbia on Tuesday dismissed a class action and three individual lawsuits against the U.S.

Treasury and the Federal Housing Finance Agency for altering Stock Purchase Contracts and profit sweepers fannie Mae and Freddie Mac at the Treasury. Treasury Warrant to Purchase Fannie Mae Common Stock Treasury and Federal Reserve Purchase Programs for GSE and Mortgage-Related Securities Third Amendment – Fannie Mae Amended and Restated Certificate (amended September 30, 2019). . Reflects complaints, responses, requests, orders and sample notes from January 1, 2011. Additional or old documents may be available in Pacer. . Third modification of Fannie Maes modified and reputed Senior Preferred Stock Purchase Agreement with Treasury (August 17, 2012) . .

On August 17, 2012, the Ministry of Finance and businesses amended the SPSA. The third amendment recalibrated the calculation of quarterly dividends paid by companies to the Ministry of Finance. Instead of 10% (or, in some cases, 12%) to use the liquidation preference to calculate dividend amounts – a practice that has contributed to companies using the commitment made by the Ministry of Finance – the third amendment based dividend amounts on net assets. This has helped to ensure financial stability, ensure full financial benefits for taxpayers, and eliminate the need for Fannie Mae and Freddie Mac to borrow from the Treasury only to repay dividends to the Treasury. The Third Amendment suspended the periodic commitment fee as long as the dividend amounts were based on net assets. The Third Amendment also removed the requirement for companies to obtain approval from the Department of Finance for asset disposals at a fair value (individually or total) of less than $250 million, but required companies to submit annual risk management plans to the Ministry of Finance.